What's the Deal with Obama and Wall Street?

Barack Obama has never faced the kind of criticism Hillary Clinton has endured for cozying up to Wall Street. It may simply be that he's just a much more gifted politician and communicator. It may be that he's had a shorter career in public life, with less time to be tarred and feathered by the opposition and the media along the way. Certainly, her being a woman with ambition always plays some role. But Obama's ties have always been there, something laid out quite thoroughly in a Bloombergpiece Monday that asks a vital question: Can Obama, and the party he still essentially leads in the absence of a true successor, afford to stay close to Goldman Sachs and co.? The 44th president is certainly putting that to the test, as he's embarked on a Wall Street speaking tour within a year of leaving office.

Advertisement - Continue Reading Below

By the end of September, Obama will have spoken to Northern Trust Corp., Carlyle Group, and Cantor Fitzgerald (or their clients). All three are prominent Wall Street financial firms, but most people know Cantor Fitzgerald as the firm that lost 600 employees on 9/11. Obama's speech to that particular firm will come during a three-day healthcare conference later this month and does not appear to be connected to the anniversary of the attacks.

Since leaving office, Obama has made as much as $400,000 per appearance on what could easily be called the Crooked Hillary Circuit. Of course, that characterization depends on the idea that a politician giving a speech to a group means they are far more likely to be sympathetic to that group and its interests. Maybe so. It also often rests on the holder's precept that Wall Street is a monolithically bad actor whose interests run counter to the national interest.

Getty

Advertisement - Continue Reading Below

That's a tough thing to prove, but Obama's sustained relationship with Wall Street is not. As Bloomberg illustrated:

Obama has picked private equity, hedge fund, venture capital and banking veterans to oversee his foundation, and an alumnus of Goldman Sachs Group Inc. to advise him on investments. Northern Trust is a bank that specializes in wealth management for rich families and services for big funds. The event had gone unreported, but a program accessible on the firm’s website lists Obama alongside executives from Microsoft Corp., IBM and Michael Bloomberg, majority owner of Bloomberg LP.

Northern Trust, based in Chicago, gave Obama a discount on a $1.32 million loan for a mansion in that city in 2005, after he was elected to the Senate, the Washington Post reported. The rate was changed to account for an offer from another lender, a spokesman for Obama said three years later. Doug Holt, a spokesman for Northern Trust, wouldn’t comment for this story.

As the report grants, these engagements have helped Obama raise money for his foundation and other philanthropic efforts. According to a spokesman, “His paid speeches in part have allowed President Obama to contribute $2 million to Chicago programs offering job training and employment opportunities to low-income youth." He is also completely within his rights to accept money for his time at a level the market dictates it is worth. (That would, in theory, be music to a principled conservative opponent's ears.) But is it really worth it, when his party's most recent presidential candidate was pilloried during both the primary and general election for her ties to Wall Street?

Advertisement - Continue Reading Below

Advertisement - Continue Reading Below

Getty

Despite conservative meltdowns about creeping socialism, Obama's economic record was not particularly far left. While he did offer criticism of the financial services industry in the wake of the Great Recession, the Obama administration failed to prosecute any major bankers and failed to break up the Too Big to Fail outfits. The Justice Department pursued civil penalties, but almost nobody went to jail for committing a crime. This was among his greatest mistakes as president.

Obama failed to prosecute any major bankers and failed to break up the Too Big to Fail outfits.

Advertisement - Continue Reading Below

(The other frontrunner was Obama's decision to continually support Debbie Wasserman Schultz as chair of the Democratic National Committee while the party lost more than 900 state legislature seats, both houses of Congress, and eventually the White House.)

The impunity (and taxpayer-funded bailouts) granted to Wall Street fed the perception that there is a class of elites in this country who all keep each other out of trouble while they hoover up a disproportionate share of society's resources. The Democratic Party appeared to be just another player in that scheme, no better at—or more interested in—protecting the common man. That was a key strain in the Bernie Sanders movement, and became a crucial weapon for Donald Trump as he battled both establishment Republicans and Hillary Clinton.

Obama's decision to continue giving six-figure Wall Street speeches does not make him an irredeemable pawn of the industry. But as Bloomberg reminds us, he is still active in American politics, even providing a big nudge for Wasserman Schultz's successor as DNC chair, Tom Perez. It bolsters the argument that the Democrats will still look out for their Wall Street friends, even in an era when Bernie Sanders and Elizabeth Warren are in the ideological ascendency.

But the whole thing seems unnecessary. Penguin Random House are paying President Obama and the former first lady upwards of $60 million to write a couple of books. Does he need the 400 grand from Northern Trust Corp.? Does he need it right now?